Procurement 101 – Director of Purchasing State of Utah Procurement 101 – Douglas Richins Director of Purchasing State of Utah

Open Competitive Opportunities Fair and Reasonable Treatment Reliable Customer Prompt Pay Why Market to State Government?

Common Procurement Methods  Request for Quotation (RFQ)  Invitation for Bid (IFB) Multi-Step Competitive Sealed Bid  Request for Proposal (RFP)  Request for Information (RFI) Less Common Methods: RFR, SOIQ

Common Procurement Methods Request for Quotation (RFQ):  Uses: Low Dollar/Risk, May be Written or Verbal (Telephone, Quotes)  Method of Award: Low Cost Request for Interest (RFI):  Uses: Surveying the marketplace to determine a variety of factors  Method of Award: None

Common Procurement Methods Invitation for Bid (IFB):  Uses: Solicitations where requirements are well defined and detailed - Goods and/or Services - Formal Process, Written Documents, Public Openings  Method of Award: Determine which bidder can provide the goods and/or services in accordance with the specifications, in the time required, at the lowest price.

Bid Evaluation and Award Award Criteria:  Award criteria is set forth in each solicitation.  Award is made to the responsive and responsible bidder whose bid meets or exceeds the requirements and criteria set forth in the solicitation.

Bid Evaluation and Award Responsive Bidder :  A bidder whose bid meets or exceeds administrative requirements, technical specifications, and contractual terms and conditions. Responsible Bidder:  Bidder has the ability in all respects to successfully perform the contract requirements.

Common Points of Bid Evaluation  Compliance with Mandatory Bid Requirements Timely Signatures Required Forms Bid Security  Compliance with Minimum Specifications Product Experience Expertise Delivery

Bid Evaluation and Award Responsive Indicators:  Specifications and terms and conditions  Signing bid and any other documents  Bonding requirements  Delivery time  License requirements - Current and Active  Product testing (meeting specifications)  Samples

Evaluation and Award Responsible Indicators:  Proven Ability to Perform - Experience  Inventory  Staff and/or Technical Support  Equipment, Resources, and Facilities  Financial Resources

Common Procurement Methods Multi-Step Competitive Sealed Bid Uses: Obtain benefits of the competitive sealed proposal procedure through the solicitation of technical offers. Combination of the RFP and IFB process RFP - Technical evaluation process IFB - Award process Method of Award: Two phase/step process Step one - Technical Proposal Step two - Bid Pricing

Common Procurement Methods  Uses: Variable Specifications Several Possible Solutions  Method of Award: Best Solution/ Best Value Point Based Evaluation Evaluation Team  Evaluation Technical Evaluation Cost proposal Evaluation Opportunity for Best and Final Offers? Request for Proposal (RFP):

Sole Source Purchase  Manufactured and marketed by a person or persons having exclusive right to manufacture and sell the product.  Multiple distributors (Not a Sole Source, Should beCompetitively bid)  Purchases require written justification from the using agency.

Single Source Purchase  Item is unique and possesses specific characteristics that can be filled by only one source.  Purchases require written justification from the using agency.

Documentation for Sole Source & Single Source  Is product or service unique and easily established as one of a kind?  Can program requirements be modified so that competitive products or services may be used?  Is product available from only one source and not merchandised through wholesalers, jobbers or retailers?  Must items be interchangeable or compatible with in-place items?

Cooperative Purchasing Cooperative purchase agreement allows the use of a contract by other specified purchasers –Municipality, county, local government entities Benefits: –Volume Purchases - reduce product cost –Reduction in administrative expenses Advertisement (Solicitation) & Development Acquisition Time

Types of Contracts

Term Contracts  Term Contract - establishes a “source of supply” for the purchase of goods and/or services made over a specified period of time.  Term of Contract: - Usually one year, dependent on external factors (commodity, market conditions, compatibility) - Multi-year contract (- Extension options yearly)  Other terms familiarly associated with these types of contracts are “Open-ended Contracts, Blanket Contracts, Requirements Contracts, or Purchase Agreements.”

Term Contracts  Key Agency Benefits Volume Discounts and Increased Competition Volume Discounts and Increased Competition Administrative and Time Savings Administrative and Time Savings  Advertisement (Solicitation) & Development  Acquisition Time Standardization and Higher Quality Standardization and Higher Quality

Term Contracts Estimated purchase requirements for the contract period Prior Purchases, Agency data, survey, vendor reports Do NOT guarantee any purchases will be made against contract (indefinite quantity) Contract variations or different arrangements which include, but are not limited to: Definite quantity for a definite period Indefinite quantity for a definite period Indefinite quantity for an indefinite period

Agency Term Contracts Agency term contracts are established for individual agencies which have a specific need for a product or service which is not applicable to other state agencies. Golf Equip (Environment and Conservation) Uniforms (Correction) Guard Rails (DOT) Advertising/Marketing

State Cooperative Contracts Established for products or services which are common to all agencies: – Office Supplies – Paper Products – Vehicles – Copy Machines – Food –Temp Services (Definite period & Indefinite quantity)

Term Contracts Methods of Awarding Term Contracts  Single Award  Groups of line Items  Line Item  Percentage Discount from Catalog  Geographic Location  Multiple Award/ Multiple Listings

Other Contracting Methods  Preferences  Particular Groups Those with Disabilities Correctional Industries In-State / Reciprocal  GSA Contracts May require Statutory authority; Terms and Condition Conflicts  Negotiation May require Statutory authority; May be limited to individuals.

Variety of Pricing Structures Firm Price Without Price Adjustment With Price Adjustment allowance Firm Percent Discount(s) off published price list Price List may change Percent Discount does not change

Variety of Pricing Structures User Cost + Plus or Minus % of predefined cost  Well defined and auditable cost. Time and Materials Time: Labor hours at specified fixed hourly rate includes wages, overhead, admin cost, and profit Materials: At cost, includes handling cost (if allowed) (many States utilize fed travel rates:mileage, airfare, lodging)

Agency Delegations Grants agency authority to purchase under the same procedures as Central Purchasing Delegations usually granted for specific: –Commodity Code (description) Perishable Commodity (Fresh Fruits & Veg.) –Dollar amount –Time Frame

Agency Local Purchases Agency authorized to purchase product/service under specific guidelines: l Where product/service is not available from an existing term contract. l Established dollar threshold l Competitive bidding requirements < $1,000 - Agency may purchase w/o competitive bid $1,000-$5,000 - Agency obtains three competitive bids

Tips for Winning State Contracts XVisit NASPO Website XGet “Vendors Guide: How to Do Business with the States” XRegister with state(s) – Check out their Website XVisit State procurement officer(s) XMeet with state agencies(s) XDaily review of solicitations XActive in user groups - trade shows

Tips for Winning State Contracts XPreparing the Bid or Proposal X Carefully read the solicitation X Sign the bid document X Review previous bid information X Ensure your response is complete X If applicable, attend pre-bid conferences

Tips for Winning State Contracts X Preparing the Bid or Proposal - (Cont.) XSubmit complete, timely responses XUnderstand the evaluation system XUnderstand the state law on “Trade Secrets” X Do not change or take exception to Terms and Conditions (T’s & C’s) X Ask questions

Tips for Winning State Contracts XEvaluation of Bids or Proposals XDon’t assume proposals will be negotiated XAsk questions about process (most RFP evaluations are not public until award announcement)

Tips for Winning State Contracts XReview competitor’s Bids or Proposals XReview the bid or proposal file and competitors bid and proposals XDetermine timing of next requirement XMarket your Products or Services